SOURCE: FinMetal Mining, Ltd.

February 12, 2007 09:00 ET

FinMetal Signs Major Agreement -- Positions Company to Acquire One of the World's Largest Portfolios of Advanced Nickel Projects

TAMPERE, FINLAND -- (MARKET WIRE) -- February 12, 2007 -- FinMetal Mining Ltd. (OTCBB: FNMM) is pleased to announce that on February 6th, 2007 it reached an agreement to purchase up to 100 percent of the issued and outstanding ordinary shares of Magnus Minerals Oy, a private company organized pursuant to the corporate laws of Finland. The deal with Magnus positions FinMetal Mining to become a leading developer of advanced nickel projects in Finland and brings with it a team of mining professionals with extensive domestic nickel expertise.

The Magnus property package represents one of the world's largest known land holdings with high potential for developing nickel ore reserves. The deal positions FinMetal to acquire claim reservations and claims covering approximately 2,500 Km2 of Finland. More than forty (40) individual prospects are contained in the Magnus property package, almost all of which have encountered nickel mineralization in historical drilling undertaken by the Finnish geological survey (GTK) and Outokumpu Oy. The reported nickel grades are sufficient for economic exploitation if sufficient tonnes can be discovered. None of the prospects have been investigated using modern geophysical and geological exploration techniques and most of the previous work was concentrated in shallow zones of little more than 100m from surface. For various reasons Finland has been subject to limited modern competitive exploration.

FinMetal's proposed exploration program is based upon the expectation that exploration at deeper levels, to depths of up to 1000m, may lead to the discovery of substantial extensions to the known nickel mineralization in several of the prospects. FinMetal intends to use modern geophysics to better define drill targets. Techniques used will likely include detailed magnetometry, airborne and down-hole electromagnetometry and high-quality interpretation with a large amount of emphasis on structural geology.

Former Inco VP of Exploration and current FinMetal Director, Robert Horn stated, "The key to exploration success is first class people, the best geophysical technology and geological interpretation. Inco had all these components when between 1996 and 2003, the Sudbury, Ontario exploration team discovered in excess of $2.2 billion net value of metals, on a budget of $48 million. I believe that at FinMetal we are putting together a strong and experienced team that will apply the very best skills and technology to the task."

Mr. Horn continued, "Finland is arguably the most promising place in the world to develop large sulphide-hosted nickel deposits. It has the right geology with major nickel deposits -- particularly the giant Pechenga mine, with historic high-grade reserves containing 4.7Mt of nickel metal (annexed from Finland by Russia in 1945) but has had very little exploration compared to other nickel districts in the world. Finland is politically and socially stable and a member of the European Union and the Eurozone monetary area. Both central and local governments are strongly supportive of mining."

Under the terms of the deal, for FinMetal to acquire an initial 30% interest in Magnus, the company must pay 5,967,000 euros and issue a total of 8,000,000 FinMetal common shares, each valued at US$1.42, as determined by the market closing price on February 6th, 2007. The payment is due by March 31st, 2007.

FinMetal has two separate options to buy the remaining shares in Magnus as follows:

(a) The first option positions FinMetal to increase its interest in Magnus to 51% by acquiring a further 21% of Magnus shares by making a cash payment of 5,005,380 euros on or before December 31st, 2007.

(b) The final option enables FinMetal to acquire the remaining 49% of Magnus shares for a total purchase price of 11,997, 285 euros. The Final Option must be exercised on or before March 31st, 2009.

Magnus reported the technical information on its properties using data obtained largely from the GTK and from claim reports filed by Outokumpu Oy. Three areas are summarised below. Note, as far as can be determined, grades reported are expressed only as sulphide not total metal. They do not include nickel and copper contained in the silicate rock-forming minerals. This should be taken into account when comparing FinMetal prospect grades with those of other reported deposits where grade may include nickel contained in rock-forming minerals and not metallurgically recoverable.

Enonkoski Belt

Magnus owns eleven nickel/copper prospects in this 60Km long belt of mafic/ultramafic rocks and black schists which is part of the 400Km long Central Ore Belt that contains most of Finland's historic base metal deposits. The prospects include the old Hälväla mine which is reported to contain shallow remnant resources of more than 400,000t @ 1.41% Ni and 0.33% Cu. This deposit is open below 265m and along strike. In the remaining prospects drilling has indicated potential for large tonnage open pit reserves with grades ranging from 0.2% Ni to 0.84% Ni. The work planned in this area will consist of detailed geology using existing drill core and down-hole and surface geophysics with the primary objective of locating high grade ore bodies amenable to underground mining, with a secondary target of shallow low grade ore.

Vammala Belt

Twenty-one prospects are located along this 90Km long belt which includes three small past producing mines in the southwest of the country. Twelve prospects have been drilled and have located shallow nickel mineralization with grades ranging from 0.15% to 0.83% nickel with associated copper. The exploration objective will be primarily for low grade, large tonnage, shallow ore amenable to open pit mining with a secondary target of high grade underground ore.


The area is located in the southern part of the Outokumpu mining district. A small tonnage containing 1.21% Zn, 0.71% Cu, 0.18% Ni and 0.15% Co has been identified at Hietajärvi and very thick intersections of more than 100m of low grade nickel are reported from diamond drilling. The target in this district would again be primarily large shallow open pittable ore bodies but in this case with significant zinc as well as nickel copper and cobalt.

FinMetal had previously optioned four properties from Magnus including the following:


A bulk sample of 20,000 tonnes with 1.4% nickel and drill intersections of 20.45m @ 3.23% Ni and 7.05m @ 1.78% Ni were reported from this prospect as well as thick low grade intersections of 49.65m @ 0.42% Ni and 45.25m @ 0.34% Ni. A small, shallow zone of mineralization was outlined by the GTK. The exploration effort will be directed towards finding extensions of this zone and reserves that may be placed rapidly into production. Down hole geophysics and detailed geology will be the primary exploration tools.


The exploration target is a low grade high tonnage deposit such as that at Talvivaara: (338Mt: 0.27%Ni, 0.56%Zn, 0.14%Cu, 0.02%Co) 60Km to the north in identical geology which is planned for development. Drilling at Rautavaara by GTK has located an inferred resource of 21 million tons of 0.21% nickel, 0.45% zinc, and 0.10% copper, down to a depth of 100 meters. Planned exploration includes airborne EM to seek extensions to this mineralization.

On Behalf of the Board:

Daniel Hunter - CEO


This release contains forward-looking statements that are based on the beliefs of FinMetal Mining Ltd.'s management and reflect FinMetal Mining Ltd.'s current expectations as contemplated under section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended. When used in this release, the words "estimate," "project," "believe," "anticipate," "intend," "expect," "plan," "predict," "may," "should," "will," "can," the negative of these words, or such other variations thereon, or comparable terminology, are all intended to identify forward-looking statements. Such statements reflect the current views of FinMetal Mining Ltd. with respect to future events based on currently available information and are subject to numerous assumptions, risks and uncertainties, including, but not limited to, risks and uncertainties pertaining to development of mining properties, changes in economic conditions and other risks, uncertainties and factors, which may cause the actual results, performance, or achievement expressed or implied by such forward-looking statements to differ materially from the forward-looking statements.

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